Contributions-donations made to political candidates, parties, campaigns, committees, etc. with the purpose of influencing elections.

Expenditures-”Any purchase or transfer of money or anything of value, or promise or agreement to purchase or transfer money or anything of value, or payment incurred or made, or the use or consumption of a nonmonetary contribution for the purpose of influencing elections.”[2]

Independent Expenditures- “an expenditure by a person expressly advocating the election or defeat of a clearly identified candidate that is not made in concert or cooperation with or at the request or suggestion of the candidate, the candidate committee, a party, or their agents.”[3]

Disclosure-candidates and committees are required by law to file disclosure reports, disclosing contributions (including donors) and expenditures. The reports are available for the public to view.

Soft money - money contributed to a political candidate or party that is not subject to federal regulations

Electioneering communications - political advertisements that “refer” to a clearly identified federal candidate and are broadcast within 30 days of a primary or 60 days of a general election

Political Action Committee (PAC)-also known as a “non-candidate committee” an organization that raises money from members to donate to political campaigns supporting or opposing a candidate, ballot initiative, or legislation. PACs coordinate with political candidates when making a donation – usually through a candidate questionnaire or interview. PACs must abide by Campaign Spending laws that establish contribution limits for their money raised.

Super PAC-officially known as an “independent expenditure” committee, Super PACs are allowed to raise money without any contribution limits, and Super PACs are also allowed to spend unlimited amounts of money independently of candidate campaigns (i.e., they are not allowed to coordinate with candidates or political parties).

Candidate Committee-the official term used to distinguish a political candidate’s campaign team.

Are there limits on the size of political contributions?

Different limits apply depending on who is giving and who is receiving the contributions.

There are limits on donations to candidates and political parties. The Supreme Court has declared that such restrictions are constitutional because allowing unlimited contributions to elected officials (or political parties) could lead to corruption. Current rules set a $2,600 per-person per-election limit for federal candidates. (Each state sets its own limits on donations to state or local candidates.) There is a $32,400 per-person per-year limit on donations to national party committees, and a $10,000 total limit on per-person contributions to state, district or local party committees.[4]

But different rules apply to non-party, outside groups called political action committees, known as PACs. If a PAC contributes directly to candidates, the most a person can donate to the PAC is $5,000. Significantly, if a PAC declares that it will spend its money totally independently from a candidate’s campaign, then there are no limits on donations to the PAC. These groups, which can receive unlimited contributions from individuals, corporations, or unions, are commonly called “Super PACs.”

Finally, some non-profit groups, called “social welfare” organizations, or “501(c)(4) groups,” can also accept unlimited contributions from individuals, corporations, and unions. The primary purpose of these groups cannot technically be political, but they can spend substantial amounts on political activities, such as TV commercials.[5]

About these Super PACs—where did they come from?

Traditional PACs wield influence by either donating directly to candidates or spending independently (by airing television advertisements, for example). But traditional PACS have a contribution limit of $5,000 per-person per-year.

By contrast, there are no limits on Super PAC donations. Super PACs are a consequence of the Supreme Court’s ruling in Citizens United v. FEC. The Supreme Court previously upheld donor limits for direct contributions to campaigns and party committees because the Court believed that unlimited contributions could lead to corruption. But in Citizens United, the Court declared that independent political spending, because it was not coordinated with candidates, could not lead to corruption concerns.

After Citizens United, a federal appellate court in Washington, D.C. heard a case called SpeechNow.org v. FEC. In SpeechNow, the court interpreted Citizens United to mean that as long as a PAC spends its money independently (i.e. does not contribute to, or coordinate with, a candidate), the PAC is free from any contribution limits. Provided a political committee restricts their spending to independent expenditures, it can accept unlimited contributions. These political committees are what is commonly known as Super PACs.

Why does Campaign Finance Reform matter?

Corporations already wield tremendous influence in our political system by virtue of the billions of dollars they spend on campaign contributions and lobbying every year, even in a system with limits on political giving. In 2009, the health care industry spent more than $263 million on lobbyists. Since the Supreme Court ruled that any limitation on corporate contributions – which were in place since 1907 when Congress passed the Tillman Act – are unconstitutional, corporations and unions have begun to crowd out the general public and will start to become the principal source of money for any candidate who hopes to win a seat in Congress.

Corporations would have so much money to donate to candidates that they can use it to drown out the voices of individual citizens. Reforms dealing with climate change or skyrocketing health care costs will only be possible if they somehow benefit the huge corporations that are bankrolling elections. More likely, companies will continue to oppose these and other populist measures in favor of legislation addressing their specific corporate interests.

[5] Backer, Jonathan. The Brennan Center for Justice, "Money in Politics 101: What You Need to Know About Campaign Finance After Citizens United." Last modified September 28, 2012. Accessed September 4, 2013. http://www.brennancenter.org/analysis/money-politics-101-what-you-need-know-about-campaign-finance-after-citizens-united.